Gasoline Prices Drop to 1.84 USD/Gal as Global Average Falls to 1.29 USD/Liter in December 2025
Dec, 2 2025
Gasoline prices in the U.S. slipped to 1.84 USD per gallon on December 2, 2025 — a 2.02% daily drop that’s part of a broader, months-long decline. The drop comes as crude oil inventories swell, global demand softens, and refineries churn out more fuel than drivers are using. Even the slightly higher figure of 1.86 USD/gal reported the same day by Trading Economics still marks a 5.29% year-over-year plunge. This isn’t just a blip. It’s the latest sign that the energy market is resetting after years of volatility — and it’s putting real money back in drivers’ pockets.
Why Gasoline Is Falling — And Why It Matters
The decline isn’t random. U.S. gasoline stocks rose to 2,513.00 thousand barrels in November 2025, up from 2,327.00 thousand barrels the month before. That surplus, combined with weaker-than-expected seasonal demand, has kept prices pinned near a one-month low. Futures for New York Harbor gasoline hovered below $1.90/gal throughout late November, trading close to the $1.85 level hit on November 25. Meanwhile, crude oil benchmarks like West Texas Intermediate have remained subdued, pressured by record output from the U.S. and steady production from OPEC+ members.It’s not just gasoline. Naphtha, a key refinery input, fell 4.73% last month and 13.47% year-over-year. Propane, often used for heating and agriculture, dropped 13.17% annually despite a small 2.86% daily uptick. These aren’t isolated moves — they’re signals of an oversupplied market across the board.
Global Divide: Who Pays What for Gas
While U.S. drivers are celebrating lower prices, the global picture is starkly uneven. As of November 24, 2025, the GlobalPetrolPrices.com average for Octane-95 gasoline stood at 1.29 USD per liter — roughly $4.87 per gallon. But that average hides a wild range: from 0.90 USD/liter in oil-producing nations like Iraq and Venezuela to 3.716 USD/liter in high-tax countries like Norway and the Netherlands.Here’s the pattern: rich nations with high environmental taxes — think Germany, the U.K., or Singapore — pay double or triple what oil exporters like Kuwait or Saudi Arabia charge. In the U.S., where fuel taxes are relatively low and domestic production is high, prices are now among the lowest in the developed world. The contrast isn’t just economic — it’s political. Countries that rely on fuel revenue are struggling to balance budgets, while others are using the price drop to phase out subsidies.
What’s Next? The EIA’s 2026 Forecast
The U.S. Energy Information Administration (EIA) doesn’t expect this trend to reverse anytime soon. In its December 2025 Short-Term Energy Outlook, the agency predicts gasoline will average below $3.00 per gallon in 2026 — a 10% drop from 2024. Diesel, meanwhile, is forecast to fall to $3.50/gal, down 7%. That’s a win for truckers, delivery services, and farmers who’ve been squeezed by high fuel costs for years.But not all energy prices are falling. Natural gas is heading the other way. The EIA expects the Henry Hub spot price to average nearly $3.90 per million British thermal units (MMBtu) this winter (November 2025–March 2026), driven by colder temperatures and higher heating demand. That’s good news for producers but could mean higher home heating bills for millions.
The Bigger Picture: A Market in Transition
This price slump isn’t just about supply and demand. It’s also about shifting energy habits. Electric vehicle adoption is accelerating, especially in California and the Northeast. Ride-sharing apps are optimizing routes to cut fuel use. And even traditional drivers are cutting back — not out of ideology, but because they’ve learned to budget for higher prices in recent years, and now they’re enjoying the relief.Meanwhile, energy analysts at Energy Intelligence are watching policy changes closely. The U.S. House’s push for permitting reform for pipelines and refineries could boost domestic supply further — but only if it survives Senate scrutiny. And while the global average gasoline price is falling, the gap between oil producers and consumers is widening. That tension could spark new trade disputes or even subsidy wars in the coming year.
What This Means for You
If you drive, fill up, or rely on freight, this is good news. Lower fuel prices mean lower costs for groceries, packages, and even public transit fares. But if you’re in the energy business — whether as a worker, investor, or policymaker — it’s a warning. The era of high prices may be over. Companies that bet on sustained $4/gal gasoline are scrambling to adjust. Investors are shifting capital toward renewables and storage. And governments are rethinking how they fund infrastructure without fuel tax revenue.Frequently Asked Questions
Why are U.S. gasoline prices falling so fast compared to last year?
U.S. gasoline prices have dropped 5.29% year-over-year due to record domestic production, weaker seasonal demand, and rising inventories. The U.S. is now producing more crude and refined fuel than it consumes, leading to a surplus. Meanwhile, global economic slowdowns in Europe and Asia have reduced export demand, further pressuring prices.
How does the global average of $1.29/liter compare to what Americans are paying?
At $1.29 per liter, the global average translates to about $4.87 per gallon — nearly triple the U.S. price of $1.84/gal. That’s because most countries impose heavy fuel taxes and import duties. The U.S. has low taxes and high domestic production, making it one of the cheapest places in the developed world to buy gasoline.
Will gasoline stay below $3/gal in 2026?
The U.S. Energy Information Administration (EIA) forecasts gasoline will average under $3.00/gal in 2026, down 10% from 2024. That’s based on continued high U.S. output, moderate demand growth, and stable crude prices. But a major supply disruption — like a hurricane hitting Gulf refineries or Middle East conflict — could push prices back up quickly.
Why is natural gas going up while gasoline is going down?
Natural gas and gasoline are traded differently. Gasoline is a refined product tied to crude oil and transportation demand. Natural gas is used mainly for heating and power generation. This winter, colder forecasts and limited storage reserves are driving up the Henry Hub price. It’s a seasonal spike, not a long-term trend — but it’s still hitting home heating bills.
Which countries have the cheapest and most expensive gasoline?
As of late November 2025, Venezuela and Iraq had the lowest prices at around $0.90/liter due to state subsidies and domestic production. At the top, Norway and the Netherlands charged over $3.70/liter — among the highest globally — because of heavy environmental taxes and carbon pricing. The U.S. sits near the middle of the developed world, cheaper than most of Europe but more expensive than oil-rich Gulf nations.
Could this price drop lead to more driving and higher emissions?
Yes, historically, lower fuel prices have led to increased vehicle miles traveled. In 2015–2016, after a similar price drop, U.S. driving rose 2.5% in 18 months. That’s a concern for climate goals. But today, EV adoption and remote work trends are offsetting some of that rebound. Still, without stronger fuel efficiency standards, any price drop risks undermining emissions progress.